Otitis media with effusion (OME) is one of the most common diseases of early childhood. Considerable controversy surrounds whether a history of OME and associated hearing loss causes language, auditory processing, and later learning problems. Children with similar OME and hearing loss histories have been shown to have different language and academic outcomes, and the differential role of the environment in these relationships may account for some of these discrepancies. Indeed, it is increasingly clear that the quality of the caregiving environment (e.g., parent-child interaction, classroom interactions) impacts children's development. Whether OME/hearing loss has a direct effect, underlying auditory processes mediate, and/or the environment moderates the linkage between early OME history and language and academic sequelae, is still undetermined. This project is designed to examine the extent to which OME with accompanying hearing loss during early childhood and subsequent auditory processing relate to language and academic performance during the first three years of elementary school. In this broad context, we will examine the role of the child's home and classroom environments in moderating any effects. The specific aims of this study are to examine: a) the amount of OME with accompanying hearing loss from birth to three years in relationship to children's later language (i.e., vocabulary, syntax, and discourse), attention, auditory processing, working memory, and academic achievement during the first three years of elementary school; b) how the quality of the home and classroom environments moderate the association between OME/hearing loss and children's later language development and school performance; and c) how children's auditory processes serve as intervening variables in the association between OME history and later language, attention, and classroom performance. We will follow 179 children from geographically-diverse lower and middle socioeconomic status families whose OME and hearing histories, language development, and home and child care environments have been prospectively documented since infancy. In the proposed study, new measures will be applied to the cohort including: a) auditory electrophysiology, binaural processing, and central auditory processing; b) vocabulary, syntax, discourse, memory, attention, and academic achievement; and c) classroom and family environments. Patterns of language, attention, working memory, and school performance over time will be studied in relation to early OME/hearing loss, auditory processes, and the environment. Growth curve methods will be used to quantify development of each attribute, and indices of these individual growth curves will be related to measures of OME with associated hearing loss. Since OME is a nearly ubiquitous condition of early childhood, factors that mediate or moderate children's ability to function optimally in the academic environment are important to delineate. Resources then can be focused on those children at highest risk for developmental sequelae.